UICI ILI U TUULII CUOISE II MATURITY RISK PREMIUM The real risk-free rate is 2.25%, and inflation is expected to be 3.5% for the next 2 years. A 2-year Treasury security yields 8.5%. What is the maturity risk premium for the 2-year security? Round your answer to two decimal places. 0% SIITII CILII EITI E EXPECTED INTEREST RATE The real risk-free rate is 2.9%. Inflation is expected to be 3% this year, 4.1% next year, and 3.4% thereafter. The maturity risk premium is estimated to be 0.05 x (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round your intermediate calculations. Round your answer to two decimal places. % UICI ILI U TUULII CUOIETTI DEFAULT RISK PREMIUM A company's 5-year bonds are yielding 8.05% per year. Treasury bonds with the same maturity are yielding 5.3% per year, and the real risk-free rate (r*) is 2.45%. The average inflation premium is 2.45%, and the maturity risk premium is estimated to be 0.1 x (t - 1)%, where t = number of years to maturity. If the liquidity premium is 0.75%, what is the default risk premium on the corporate bonds? Round your answer to two decimal places. 0% LICITILI LUTUULII CUOISE II DE INTEREST RATE PREMIUMS A 5-year Treasury bond has a 4.4% yield. A 10-year Treasury bond yields 6.45%, and a 10-year corporate bond yields 9%. The market expects that inflation will average 3.9% over the next 10 years (IP10 = 3.9%). Assume that there is no maturity risk premium (MRP = 0) and that the annual real risk-free rate, r*, will remain constant over the next 10 years. (Hint: Remember that the default risk premium and the liquidity premium are zero for Treasury securities: DRP = LP = 0.) A 5-year corporate bond has the same default risk premium and liquidity premium as the 10-year corporate bond described. What is the yield on this 5-year corporate bond? Round your answer to two decimal places